Item
1.01. Entry into a Material Definitive Agreement.
Securities
Purchase Agreements and Notes
On
October 11, 2017, Sunstock, Inc. (the “Company” or “we”) entered into a securities purchase agreement
(“SPA”) with Auctus Fund, LLC, upon the terms and subject to the conditions of SPA, we issued a convertible promissory
note in the principal amount of $85,000.00 (the “Note”) to Auctus. The Company received proceeds of $74,250.00
in cash from Auctus. Interest accrues on the outstanding principal amount of the Note at the rate of 12% per year. The Note
is due and payable on July 11, 2018. The Note is convertible into common stock, subject to Rule 144, at any time after the issue
date, at the lower of (i) the lowest trading price during the previous twenty-five (25) trading day prior to the date of the
Note, and (ii) 50% multiplied by the lowest trading price during the twenty-five (25) trading day prior to the conversion date.
If the shares are not delivered to Auctus within three business days of the Company’s receipt of the conversion notice,
the Company will pay Auctus a penalty of $2,000 per day for each day that the Company fails to deliver such common stock
through willful acts designed to hinder the delivery of common stock to Auctus. Auctus does not have the right to convert the
Note, to the extent that it would beneficially own in excess of 4.99% of our outstanding common stock. The Company shall have
the right, exercisable on not less than three (3) trading days’ prior written notice to Auctus, to prepay the outstanding
balance on this Note for (i) 135% of all unpaid principal and interest if paid within 90 days of the issue date and (ii) 150%
of all unpaid principal and interest starting on the 91st day following the issue date. In the event of default, the amount
of principal and interest not paid when due bear default interest at the rate of 24% per annum and the Auctus Note becomes immediately
due and payable. Regarding the Note, the Company paid Auctus $10,750.00 for its expenses and legal fees.
The
Note is a short-term debt obligation that is material to the Company. The Note also contains certain representations, warranties,
covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC, and increases
in the amount of the principal and interest rates under the Note in the event of such defaults. In the event of default, at the
option of Auctus and in Auctus’s sole discretion, Auctus may consider the Note immediately due and payable.
The
foregoing descriptions of the SPA and Note are qualified in their entirety by reference to such SPA and Note, which are filed
hereto as Exhibit 10.3, and incorporated herein by reference.
On
October 11, 2017, the “Company” entered into a securities purchase agreement (“SPA2”) with EMA Financial,
LLC (“EMA), upon the terms and subject to the conditions of SPA2, we issued a convertible promissory note in the principal
amount of $85,000 (the “Note2”) to EMA. The Company received proceeds of $74,295.00 in cash from
EMA. Interest accrues on the outstanding principal amount of the Note2 at the rate of 12% per year. The Note2 is due and
payable on October 11, 2018. The Note2 is convertible into common stock, subject to Rule 144, at any time after the issue date,
at the lower of (i) the closing sale price of the common stock on the on the trading day immediately preceding the closing date,
and (ii) 50% of the lowest sale price for the common stock during the twenty (25) consecutive trading days immediately preceding
the conversion date. If the closing sale price at any time fall below $0.17 or less. (as appropriately and equitably adjusted
for stock splits, stock dividends, stock contributions and similar events), then such 50% figure mentioned above shall be reduced
to 35%. If the shares are not delivered to EMA within three business days of the Company’s receipt of the conversion notice,
the Company will pay EMA a penalty of $1,000 per day for each day that the Company fails to deliver such common stock through
willful acts designed to hinder the delivery of common stock to EMA. EMA does not have the right to convert the note, to the extent
that it would beneficially own in excess of 4.9% of our outstanding common stock. The Company shall have the right, exercisable
on not less than five (5) trading days’ prior written notice to EMA, to prepay the outstanding balance on this Note for
(i) 135% of all unpaid principal and interest if paid within 90 days of the issue date and (ii) 150% of all unpaid principal and
interest starting on the 91st day following the issue date. In the event of default, the amount of principal and interest not
paid when due bear default interest at the rate of 24% per annum and the Note2 becomes immediately due and payable. In connection
with the Note2, the Company paid EMA $10,605 for its expenses and legal fees.
The
Note2 is a short-term debt obligation that is material to the Company. The Note2 also contains certain representations, warranties,
covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC, and increases
in the amount of the principal and interest rates under the Note2 in the event of such defaults. In the event of default, at the
option of EMA and in EMA’s sole discretion, EMA may consider the Note2 immediately due and payable.
The
foregoing descriptions of the SPA and Note are qualified in their entirety by reference to such SPA and Note, which are filed
hereto as Exhibits 10.1 and 10.2, and incorporated herein by reference.
On
October 24, 2017, the “Company” entered into a securities purchase agreement (“SPA3”) with Powerup Lending
Group, LTD (“POWER), upon the terms and subject to the conditions of SPA3, we issued a convertible promissory note in the
principal amount of $108,000.00 (the “Note3”) to POWER. The Company received proceeds of $105,000.00 in cash
from POWER. Interest accrues on the outstanding principal amount of the Note3 at the rate of 12% per year. The Note3 is due and
payable on July 30, 2018. The Note3 is convertible into common stock, subject to Rule 144, at any time after the issue date, at
61% of the lowest sale price for the common stock during the twenty (15) consecutive trading days immediately preceding the conversion
date. If the shares are not delivered to POWER within three business days of the Company’s receipt of the conversion notice,
the Company will pay POWER a penalty of $2,000 per day for each day that the Company fails to deliver such common stock through
willful acts designed to hinder the delivery of common stock to POWER. POWER does not have the right to convert the note, to the
extent that it would beneficially own in excess of 4.99% of our outstanding common stock. The Company shall have the right,
exercisable on not less than three (3) trading days’ prior written notice to POWER, to prepay the outstanding balance
on this Note for (i) 115% of all unpaid principal and interest if paid within 30 days of the issue date and (ii) 120% up to 140%
of all unpaid principal and interest starting on the 31st day up to the 180
th
day following the issue date.
In the event of default, the amount of principal and interest not paid when due bear default interest at the rate of 22%
of all unpaid principal and interest per annum and the Note3 becomes immediately due and payable. In connection with the Note3,
the Company paid POWER $3,000.00 for its expenses and legal fees.
The
Note3 is a short-term debt obligation that is material to the Company. The Note3 also contains certain representations, warranties,
covenants and events of default including if the Company is delinquent in its periodic report filings with the SEC, and increases
in the amount of the principal and interest rates under the Note3 in the event of such defaults. In the event of default, at the
option of POWER and in POWER’s sole discretion, POWER may consider the Note3 immediately due and payable.
The
foregoing descriptions of the SPA and Note3 are qualified in their entirety by reference to such SPA and Note2, which are filed
hereto as Exhibit 10.4 and are incorporated herein by reference.